Acron is a drug company that is enlarging its business. Acron would like to know how much annual production capacity to build for this drug. According to the model, Arcon can maximize its NPV by using a capacity level of 21,000 units.

The discount rate also affects the optimal capacity level. For the company, it is hard to determine the discount rate, and the change of the discount rate results in NPV. As a result, larger discount rates results in lower NPVs because future cash flows are discounted more heavily.

However, no one model works in every situation. For the model to be efficient we have to ignore some of uncertainty and focus on what we are really wants to know. To make a model more realistic, we can change the complexity of the cost input.